Case study: Investigation - contractual compliance

An international utilities group were party to a Private Finance Initiative ("PFI") contract for the construction and operation a number of sewage treatment plants in the United Kingdom.  They wished to dispose of their interests.  They were unable to obtain what they considered to be reliable financial information on the status, cash flows and profitability of the projects.

Appointed to conduct an investigation into the projects, by undertaking a review of the accounting systems and records maintained by the project managers, one of the PFI partners (another major utilities group).

Despite initial difficulties in securing the co-operation of the project manager, successfully completed the assignment within 10 days and reported to the client.

Work included: -

• Undertaking a review of the relevant PFI and JV agreements;

• Deploying a four-person team to the project manager’s head office

• Reconstructing project financial records;

• Preparation of 12-month historical and forward cash flow statements/projections; and

• Reporting to client on the records and financial information provided.